Hey {{ First Name | Founder }},
I want to talk about one of the most common, and most painful, traps I see eCommerce brands stuck in right now.
They're convinced their ROAS isn't good enough to scale. So they sit on their hands. They tweak their ads. They wait for the number to improve.
And month after month, revenue stays flat, overheads stay fixed, and profitability feels perpetually out of reach.
Here's the thing. Most of the time, the ROAS isn't the problem at all.
The Real Doom Loop Nobody Talks About
The brands I see stuck in this pattern usually look something like this:
Revenue hovering in the $50K-$50K/month range (sometimes higher!)
A ROAS that's "okay" but doesn't feel like enough to justify spending more
Fixed costs (team, warehouse, software, ops) eating a huge chunk of margin
A growing sense that ads "don't really work" for their brand The logic goes: "We're not profitable, so we can't afford to spend more on ads."
So they spend less. Or they keep spend flat. Which keeps revenue flat.
Which means overheads stay proportionally enormous. Which means they're still not profitable.
Round and round it goes. But the diagnosis is wrong. The ROAS wasn't the issue.
The volume was.
The Number You Actually Need to Know
Before you can scale with confidence, you need to know one thing: your minimum profitable ROAS.
This isn't your 4X or 5X target pulled from thin air.
It's the exact ROAS at which your business breaks even on ad spend, factoring in your gross margin, your fixed cost load, and your blended revenue mix.
For some brands it's 2.5X. For others it's 4X. It depends entirely on your numbers.
Here's a simplified version of how to calculate it:
Break-even ROAS = 1 ÷ Gross Margin %
So if your gross margin (after COGS) is 50%, your break-even ROAS is 2X. If it's 40%, it's 2.5X. That's the floor, the point below which you're losing money on every sale.
Work out how much extra margin you want to make on top of break even, this is what you will use to cover overheads.
This is your profitable ROAS. Because the moment you know your minimum profitable ROAS, everything changes.
What Happens When You Know the Number
When you know your profitable ROAS threshold, the question is no longer "is our ROAS high enough to spend?"
It becomes: "Are we hitting our target? Yes? Then why aren't we spending more?"
This is where the mindset shift has to happen. Ad spend isn't a cost you incur when you're profitable.
It's the engine that gets you there. Every incremental dollar spent that hits your profitable ROAS threshold generates real revenue, real gross profit, and, crucially, helps you grow into your fixed cost base.
The overheads that are killing your profit at $50K/month revenue are no longer a problem at $200K/month.
I worked with a brand recently doing around $80K/month, spending just $10K on paid ads, with a tracked ROAS of 5X and a blended ROAS closer to 8X.
They were sitting on a goldmine and didn't even know it. They saw ad spend as a line item to control, not a lever to pull. The moment we reframed it, and they started scaling spend deliberately, revenue followed.
The Practical Version
If you're not sure where to start, here's what I'd do:
Calculate your break-even ROAS. Use the formula above. Then stress-test it with your actual overhead load to find out how much total revenue you need to cover overheads, COGs and Ad costs and start making true business profit.
Look at your blended ROAS, not just your platform ROAS. Your Meta dashboard ROAS will always look worse than reality. Add in organic, direct, and email revenue and divide by total ad spend. This is your real number, and it's often much healthier than it looks.
If you're hitting your ROAS target, scale. Not tentatively. Hard. Increase budgets 20-30% and monitor. If efficiency holds, keep going. The goal isn't a perfect ROAS. The goal is total profit.
If you're not hitting your target, fix the unit economics first. That's a different problem, and it usually lives in creative, conversion rate, or offer structure. But don't confuse that problem with a volume problem. They need different solutions.
The brands that win at scale aren't the ones with the highest ROAS. They're the ones who knew their number, trusted it, and had the nerve to spend into it.
I have an easy-to-use template that works all this out for you - and this month I am offering free 15 minute strategy session to plug your numbers in together and see what numbers work for your business.
Here is a link to my calendly where you can book a call at a time that works: https://calendly.com/jessiehealy/coffee_with_jessie
Jessie x
